tuphat

From Politico Brussels Playbook --

A European Union law — known as the revised Payment Services Directive (or PSD2) — enters into force today, putting an end to surcharges on card payments, credit transfers and direct debits. Some countries are, however, refusing to implement the law until later in the year. The biggest winners will be airline customers, who will no longer be charged the standard €8 fee to buy tickets with a credit card rather than a debit card.

European Commission Vice President Valdis Dombrovskis said: “This could save more than €550 million per year for EU consumers. Monique Goyens, head of the European Consumer Organisation (BEUC), said: “Consumers across Europe will be happy they are rid of these irritating charges. Card surcharges meant you were paying to pay, and you never knew what you were paying until the final stage of the transaction.”

KDS777

I love how politicians say we're going to save money.

Expect airline tickets to rise incrementally to cover the cost.

SK AAR

Maybe the fares will increase, but nevertheless I welcome this legislation and hopefully it will put an end to these annoying credit card fees which in the past have been very difficult to avoid.

Now, if the politicians had also prohibited the DCC scam; I suppose it would only take a few high profile politicians to make reservations with Airbnb before something would be done about DCC too.

WorldLux

On the other hand, comparison will get somewhat easier if OTA can't charge surcharges if you pay with an other card than some obscure branded credit card. Edreams Odigeo has made an art of that practice.

KDS777

That's what it comes down to.

All types of these fees make it impossible to quickly compare pricing.

Often1

CC fees were a dinosaur anyway. Dating to a time when few people used them and there was no justification for spreading the interchange fees onto passengers who paid by other means. But, that is no longer.

Just as with all fees, there ought to be a published price which is easily seen online.

javabytes

If businesses didn't make more money splitting fees out, they wouldn't do it. See also: checked bag fees.

beckoa

Please follow the redirect as we move this post.

~beckoa, co-moderator Information Desk

mfkne

Note that the law is not the same across the EU - the implementation depends on local laws. Because the Dutch and Belgian governments didn't pass the law on time creditcard surcharges are still legal in NL and BE. The scope also varies - while the EU guidelines exempted AMEX and others from the ban (so effectively only MasterCard and Visa are affected) the UK government has decided to ban all surcharges regardless of card.

drewguy

What is the purported justification for a cc fee but not a debit card?

MHG

Simply €€€€ ...
Debit cards usually incur - depending on the country - a fixed processing fee (<1,-€) to the merchant using the system regardles of the amount.
And only when currency exchange is involved (not all EU member countries use €uro as their currency ...) the usual conversion expenses are added.

In comparison CC΄s incur significantly higher charges to the merchant (who passes them to the customer and likes to add some revenue to the transaction process ...)

1flyer

You're making a bit of a populist argument if you ask me.

I think this EU directive will increase price transparency considerably. It was a jungle out there, where sometimes the cheapest rates were only available on some obscure OTAs when using a certain obscure method of payment.

Now one may respond that price transparency need not result in lower prices. The main argument against it would be that higher price transparency also makes it easier for supplies to coordinate their prices (so-called collusion). However, the empirical literature so far suggests that prices (and price dispersion) is likely to fall in response to regulation resulting in higher price transparency.

Palal

This EU regulation still needs to be transposed into each member state's individual laws, so some states will see this enter into force before others.

mfkne

All but the Netherlands and Belgium have managed to put this into national law, which went into effect on the 13th of this month.

Palal

Still not law in Portugal. TP is still charging surcharges.